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Chapter 11

Chapter 11. Flexible Budgets and Overhead Analysis. Flexible Budgets. Static budgets Flexible budgets Flexible budget overhead performance report (read) Problem 11 – 19 page 512. Overhead Analysis. Denominator level of activity using the flexible budget

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Chapter 11

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  1. Chapter 11 Flexible Budgets and Overhead Analysis

  2. Flexible Budgets • Static budgets • Flexible budgets • Flexible budget overhead performance report (read) Problem 11 – 19 page 512

  3. Overhead Analysis • Denominator level of activity using the flexible budget • Predetermined overhead rate based on denominator level of activity • Applying overhead at standard • Variable overhead rate • Fixed overhead rate

  4. Variable Overhead Analysis • Variable overhead must have a driver that is stated in hours • Indirect effect of hours used • Variable overhead spending variance AH(AR - SR) • Variable overhead efficiency variance SR(AH – SH)

  5. Fixed Overhead Variances • Fixed budget variance Actual fixed overhead – budgeted fixed overhead • Fixed volume variance Standard rate(Denominator hours – Standard hours) or SR(DH-SH)

  6. Overhead Summary • The four overhead variances explain under- and over-applied overhead

  7. Coach Keen Says… • Reread entire chapter • Do homework 11-8, 11-15 & 11-16 • Rework all problems done in class • For Friday, April 22, read Chapter 12 pages 526-548. • Do all chapter 12 homework • Chapter 12 is a one day lecture Problem 11 – 23 page 515

  8. Coach Keen Says… • Work the review problems at the end of each chapter • Study for test by reviewing the chapters, homework, handouts, articles on WebCT, quizzes and problems done in class • Use the tutors • The workbook/study guide is available at the reserve desk at Milner Library • Chat on Tuesday night 9-11PM through WebCT • Extended office hours: Monday: 9:00-10:00 & 11:00-12:00 & 1:00-3:00 Tuesday 11:30-3:00 • E-mail questions • Review on Monday • Rest Tuesday night

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